06 August 2018

I arrived home one day last week to find that this month’s issue (August 2018) of Proceedings of the U.S. Naval Institutehad been slipped through my mail slot. After I spent a few moments reading the table of contents, I flipped back to Nick Nethery’s essay “Prepare to Fight in Megacities,” which begins thus—

There are at least 35 megacities—or “dense urban areas” in doctrinal terms—in the world, most of them adjacent to littorals. Lagos, Nigeria; Mumbai, India; and Seoul, South Korea; to name just three, are among the many that also sit in active or potential conflict zones. The U.S. military will almost certainly have to fight in one of more of the these 35 in the near future.

Oh, please anything but.

Despite my revulsion at the thought, I do recommend reading the article. Nethery is a major with the explosive ordnance disposal troops of the US Army, and he is clearly concerned about a lack of preparedness in both the Army and the Marine Corps for wading into such an overwhelming urban mess. Most of his discussion centers on how the Fire Department of New York trains recruits to work in burning high-rises and subway tunnels. He cites David Kilcullen’s work Out of the Mountains, an interesting work on (and subtitled) The Coming Age of the Urban Guerrilla (which I do recommend as well, by the way). It’s compelling stuff, and to emphasize the importance of all this, Nethery further asserts (as I have heard before) that “in the next decades, most of the world’s population will be living within artillery range of a coastline.”

So this is what strategy has come to: they live where we can get at them, so let’s prepare to shoot at them, all over the world. This is not to say that counterinsurgency is always a choice, or that armed conflict on the other side of the planet can always be ignored. Hardly. The problem is simply that in hostile megacities, the scale of the problem will exceed any reasonable American solution.

Having finished my screed, let me be a bit more polite. I am concerned that Nethery’s article may have been mis-titled. The major does cite an unnamed colonel of special forces as asserting that population density more thoroughly governs the nature of urban combat than sheer city size. And early in the recent War in Iraq, a simple “Thunder Run” secured Baghdad, a city of eight million—at least for a time. But fighting in Fallujah the next year was challenging for American ground forces—at least more than any fighting in a sprawling suburb would be. So even though American forces won an overwhelming tactical victory there, Fallujah was an instructive case. That comparatively dense city of just a quarter million people absorbed almost a division of troops.

The Marine Corps has three of those. The US Army has about ten. The National Guard can contribute at least eight more with enough notice. Taking a defended city with a semi-hostile population of ten to twenty million could require the services of an entire American corps—or more—unless local allies were actually providing the bulk of ground troops. In the past two decades, those hopes have not taken Americans far.

This is also not to suggest that the American land forces should just skip preparation for urban combat. It’s at least remotely possible that they might find themselves fighting in Seoul, though we really should imagine that South Korean troops would provide the bulk of those forces. It’s plausible that they might find themselves fighting in rather smaller Warsaw, though perhaps against a rather stretched Russian Army, which could find itself rather swallowed up by the challenge too. Vilnius? That’s another city that Americans are treaty-bound to defend, and where our common values demand solidarity. It’s a stressing case too, though more for the problems of access than the limitations of gross troop strength.

So why all the enthusiasm for alluding to battles in Mumbai and Lagos? Honestly, I suspect that this actually is about troop strength. I do not mean to make too much of a single article by a single major in a maritime journal. At the Brookings Institution earlier this summer, Commandant of the Marine Corps General Robert Neller admitted that the Pentagon has some pretty grim Plan Bs, for what happens when the next recession and higher interest rates really put the squeeze on federal spending. The Navy’s primary interest in the Army of late has been in a possibly reformed coastal artillery, this time with anti-ship missiles, to squeeze the Chinese fleet against its own shores. For the past ten years, the Air Force has shown how intervention around the world can be accomplished most with commandos and air strikes. Whether that’s a good idea is another matter. Whatever the case, though, none of this is enough to get generals of mechanized forces excited, or to offer job security to all in the ranks below.

Thus, without chatter about commitments to unsolvable problems, it’s a fair question of what the Army is supposed to do with all its troops today. Creating creative answer to that bureaucratic question may be interesting in the Pentagon, and possibly in certain offices on Capitol Hill, but it’s not the question that should directly concern Americans. Instead, they might start with why on Earth would we want to send a corps into Karachi?

25 July 2018

As a political economist, my morning trip through the newspaper (I prefer the Wall Street Journal, by the way) seems of late to elicit almost daily outrage. Wednesday brought the headline “Trump Offers Trade Aid to Farmers” (Vivian Salama and Jacob Bunge, 25 July 2018). The Trump Administration’s escalating “trade war” with a host of nations around the world is reducing American agricultural exports, and particularly from states whose electors voted for Trump. Agriculture Secretary Sonny Perdue spoke Tuesday of providing $12 billion in emergency bailout funds that would not require separate Congressional authorization or appropriation—and which would in turn provide yet another example of the excess of American presidential power. After all, what can be less sensible than a tariff followed by a subsidy to make up for the disaster of the tariff, all imposed without parliamentary debate? Such ill-conceived policy can lead to a pernicious cycle, and in the long run, we can only hope that the tomfoolery will not affect our security as well.

Let’s start with some essential theory. For those still under the spell of the latest round of voodoo, I recommend “A Brief Introduction to Trade Economics,” a most excellent essay by Princeton University’s Alan Blinder, from earlier this month in the WSJ. Demonstrating that tariffs harm one’s own people worse than they harm those abroad is a classic and elementary exercise. Moreover, as any student should know, the Trump Administration’s continuance of the Obama Administration’s spendthrift ways was only likely to increase trade imbalances in the future. If you’re not a current student of economics, take it from Maurice Obstfeld, director of research for the International Monetary Fund, whose 2018 External Sector Reportwas released just this week. The issue isn’t really European tariffs on American automobiles, which harm Europeans more than Americans. Rather, the far bigger problem is America’s grotesque fiscal imbalance. The Congress and the administration could reduce their chronic deficits, but that would fail to reward those whom Mitt Romney once called The Forty-Eight Percent with continuing and continually unaffordable income transfers.

Perhaps Mr. Trump finds these truths inconvenient, and just fancies the art of a grand deal. But if so, then as that article in the WSJcontinued, Senator Mike Rounds of South Dakota wants to know precisely “what’s the strategy? What’s the endgame here? At what point do we start seeing things move out of the chaotic state they are in now, and to where we actually see new trade agreements?” Perhaps there really is one, and it’s about to find success, such as that it. In a note to clients this evening, Charles Gabriel of Capital Alpha Partners wondered whether Trump’s machinations are actually “all going according to plan.” As CNBC reported, Trump was today claiming at the White House that he and European Commission President Jean-Claude Juncker had agreed "to work together towards zero tariffs, zero non-tariff barriers and zero subsidies for the non-auto industrial goods.”

Really? On airliners too? For all of us who have had enough, as I once wrote, of “the mutually assured destruction of the Airbus-Boeing dispute,” that seems too good to be true. Perhaps instead, though, the process really is the product here. Given the White House’s routine disdain for truth, is it too much to wonder whether the tariffs are actually about bringing about a zero-zero world? Perhaps Trump merely wishes to divert protectionist rents to relatively unproductive Americans, many of whom switched their traditional party allegiance in the 2016 election. How that is not reasonably called the corruption of petty collectivism is beyond me.

Fairly, Trumpian protectionism has not yet proved economically disastrous, but the initial signs are bad, as theory would hold. The tariffs have clearly affected the performance of large-cap equities of late, and rather disproportionately in sectors reliant on global trade. As a recent report from UBS notes, the substitutability of some products has buffered losses, but even that effect is distorting the efficient patterns of commerce. Thus the politics and the economics, which have been well reported elsewhere. So just how does this affect our ability to keep the world safe from more serious tyranny?

Consider first the short-term problem of this fresh round of insults. Simply outrageous was Commerce Secretary Wilbur Ross’s assertion that duties on Canadian metals were matters of national security. As I told the Washington Postin June, “I can’t imagine the circumstances in which a Canadian federal government would try to choke off aluminum supplies to the U.S.” Prime Minister Trudeau was even less amused, calling this nonsense an affront to the memory of Canadians who had died alongside their American comrades in battle. Recall, then, how Aaron Mehta of Defense Newsreportedtwo weeks ago that White House advisor Peter Navarro would be staying away from this month’s Farnborough Air Show due to scheduling conflicts. Uh-huh. Perhaps the real reason was that no one could take seriously a sales pitch from him. For as Paul McLeary might have alludedfor Breaking Defense, nothing says “buy Eurofighters” like special taxes on your allies’ exports.

Consider then the long-term implications of the administration’s beggar-thy-neighbor policies. If this Smoot-Hawley redux is allowed to spiral into economic perdition, the United States would be hurt most of all. For even with 24 percent of gross world product, none can expect 4.3 percent of the world’s population to dictate special terms to the planet. Enforcing unilateral banking sanctions on the Iranians is one thing, but the viability of even that stratagem has an expiration date. As the rest of the world catches up economically, the solidarity of alliances will gain in importance for America's security. But if instead, the rest of the world is left to trade amongst itself, the US might not become so disconnected as the old Soviet Union, but it will be even further diminished in relative influence.

And if policies as these persist, America’s relative economic power will decline faster. This is problematic, for even if the rents of governmental fiat are indeed the object, wealth is power. As Michael Beckley argued in his prize-winning article “Economic Development and Military Effectiveness,” success in war may largely follow success in business. Picking fights with one’s friends brings neither. Beckley’s forthcoming book, Unrivaled: Why America Will Remain the World's Sole Superpower (Cornell University Press, August 2018), argues that “the United States has unique advantages over other nations that, if used wisely, will allow it to remain the world's only superpower throughout this century.” If used wiselyseems to key here. Whatever the strategy, it certainly cannot turn on a costly bandage of subsidies applied to the self-inflicted wound of tariffs.

05 March 2018

In this morning’s Wall Street Journal, Mary Anastasia O’Grady asks “Is Canada a National Security Risk?” That’s the inescapable question posed by Donald Trump’s announcement this past week that he would use Section 232 of the oddly-named Trade Expansion Act of 1962 to impose tariffs of 25 percent on imported steel and 10 percent on imported aluminum. In a pair of essays last spring, I analyzed the Trump Administration’s then-mooted plans economically. With “Is Imported Steel a Threat to American National Security?” (10 May 2017) and “Is Imported Aluminum a Threat to American National Security?” (15 June 2017), I argued in both cases that "it isn’t now, and it won’t be in the future.”

The case of aluminum is particularly egregious. Canadian aluminum—the largest volume of imports—is inexpensive because hydro-electric power in Quebec is itself inexpensive. Aluminum production requires vast amounts of electricity, so locating aluminum production near large bauxite deposits and cheap power sources is eminently sensible. If we dig far enough into the numbers (and check my essay for those), we might conclude that Quebecois consumers are subsidizing the power that state-owned Hydro Quebec provides to the province’s largest producer. For what it’s worth, that’s largely American-owned Alcoa, the aptly-named Aluminum Company of America. Doing this is stupid, but that’s not our problem. That’s because the Quebecois are thus just subsidizing American production of aircraft—of all types, as that one of the most important uses of aluminum in the military. I thought that the administration was hoping that the folks up north would do morefor American security. Well, there it is—whatever subsidy there might be is a net transfer of wealth from Canadians to Americans. We should pocket the change, and move on.

Of course, none of this actually matters, because the volume of steel and aluminum consumed by the defense industries in the United States is quite small in the balance: probably around one percent of total domestic metal consumption. In a global war, if industry were asked to hugely increase production of tanks, ships, and aircraft, industry would draw on hugely available capacity, if the country really were repurposing civilian production for military needs. Of course, whatever aluminum the United States needed would be available from Canada. Truly, if we could not trust the Quebecois to provide that, we have far bigger problems than trade policy can address.

Then there is the familiar showmanship. Round numbers like 25 and 10 clearly are not calibrated to anything besides headlines. In short, none of this is about national security. Rather, the planned duties are transparently a sop to steel and aluminum workers who voted for Trump, largely in hopes that he would economically mollycoddle their inefficient industries.

So what to do? I offer two suggestions to legislators across the aisles and partisans around the country for undoing this about-to-be disastrous policy. First, do the American thing, and file a lawsuit. Invoking national security in this case is so obviously bogus that some federal court—normally hesitant to intervene in actual matters of national security—might just hear the case. Moreover, I may have read somewhere that taxation was an authority accorded only to the Congress. Find an aggrieved party in Northern California, so that the matter can be lodged somewhere under the customarily administration-hating Ninth Circuit. That bench has favored whales over the Navy, so this issue might just get some traction—at least enough for serious delay.

Then, while spinning out that time, present a bill to repeal Section 232. If the Congress wants a tariff, the Congress can debate a tariff. That is how things are done in representative governments. Of course, most of the Congress wants no such thing. Last week, Roll Call termed the Republican Party’s reaction to the tariff announcements as “fast, furious and negative.” In the weird skirl of policy conversations around Washington DC, however, I too often hear people talking about “creating options” for presidents. Constitutional government is about checks and balances, not unbridled power. It is time to pull this power back, eliminating an affront to the taxation authority of the Congress, and a vehicle for bogus militarization of trade policy.

19 February 2018

Amongst the more notable items in the Trump Administration’s recently released military spending plans for the next several years was termination of the Air Force’s plan to recapitalize its JSTARS fleet. The seventeen E-8C Joint Surveillance Target Attack Radar System aircraft, stationed at Robbins Air Force Base, are flown by both the regular Air Force and the Georgia Air National Guard, and their service in the 1991 Persian Gulf War was the stuff of legend. The Air Force, however, started floating the cancellation idea rather firmly this past autumn. Colin Clark of Breaking Defense reported from the Air Force Association (AFA) show of how General Mike Holmes, leader of Air Combat Command, hinted that his service was rethinking replacing JSTARS, as it would be a huge target for Russian anti-aircraft batteries in any big fight in Europe. The JSTARS, after all, is a converted Boeing 707, and those do not get away from missiles very well. All that, however, begs the question of what else does not move so fast in a fight.

To being, let us note that the three offered replacements were not remarkably more dynamic: Northrop Grumman and L3 were offering a solution mounted on a Gulfstream G550 business jet, Lockheed Martin was offering a Bombardier 6000, and Boeing predictably a 737-700. (We could have guessed that Boeing would not be offering to work with Bombardier.) Those teams had been working for some years under risk reduction contracts to refine their proposals, as the whole thing had rather kicked off with the USAF’s own analysis of alternatives in 2010. The total cost of developing and procuring the aircraft was expected to amount to about $7 billion. However, from that AFA event, Jon Harper of National Defense reported how Lieutenant General Arnold Bunch, the service’s military deputy for acquisition, stressed that cost was not the issue; it really was vulnerability.

All this reminded me of an essay I wrote back in 2013 about “the full implications of the USAF's F-35 logic.” Back then, I noted, we had been hearing from the Air Force rather strongly two arguments in favor of its F-35A, and against its A-10C: that all current combat aircraft must be multi-role, and that all future combat aircraft must be stealthy. I questioned that two-part view at the time, but I also recommended taking that thinking to its logical conclusion.

Well back in 2011, former Air Force Secretary Mike Wynne had argued on DoD Buzz that both JSTARS and AWACS should go, and that the service should put the operational savings into more F-35As. The E-3 Sentry Airborne Warning and Control System is another Boeing 707 that would not scamper away quickly from long-range anti-aircraft missiles, and the Russians and Chinese are said to have plenty. Both the ground surveillance mission of the JSTARS and the air surveillance mission of the AWACS, Wynne thought, could be accorded to the all-around sensing capabilities of the Lightning II. Perhaps it is possible—as I have said before, friends of mine call it a flying Swiss Army knife; back in March 2010, I called it a flying frigate. Presuming this is indeed technically possible, it would even further increase the levering of the USAF by the F-35. But if the USAF really does want to double-down on that bet, then there may be a few more programs that it’s willing to throw out the hatch to fully protect that funding line.

Fairly, to recapitulate my point from 2013, no one in the USAF was suggesting then, or is suggesting now, that the non-stealthy, mostly single-role tankers should be immediately retired, as they’re not expected to lean forward into combat areas. But if these two tenets of stealthy, multi-mission capability really do define the USAF’s future plans, then for consistency, the service ought to be planning to retire not just its B-1Bs, as its plans to do once its B-21s are available. In addition, it should be retiring its B-52Hs, which are not slated to go until at least the 2030s. Yes, they have the structural integrity to fly until about 2040, but as vulnerable as those aircraft would be as well, what would be the point? In a big war, they would only be useful as standoff cruise missile carriers.

In retrospect, the $12 billion that the Air Force has put into those 76 very old airplanes over the past eight years is a lot of money. After all, that role could also be taken by a commercial aircraft derivative, with presumably lower operating costs than the legendarily expensive, eight-engined B-52s, as their supply chains would leverage the global parts and service possibilities of the airline industry. Those militarized 707s had that benefit, until all the airlines stopped flying 707s. Today, at least the USAF’s KC-46s (767s) and the US Navy’s P-8s (737s) benefit from that commonality. Or perhaps, as I mused back in July 2010, “if the P-8 can haul torpedoes and cruise missiles, it's worth asking why it can't haul JDAMs as well.”

From a military standpoint, by my conception of the national technological and industrial base—and incidentally how US federal law enshrines that concept—Canadian production is as good as American. That said, nationalistic impulses vary. But as long as they place employment before profit, there’s nothing to dislike about moving production into the United States, whether the firm doing so is from Washington State, Quebec, or the Occitanie. As the WSJ noted this morning,

Airbus will move some assembly of the C-Series to its Alabama plant, a neat workaround to Bombardier’s tariff problem. More than 50 percent of the C-Series already contained U.S. origin parts, according to Bombardier. So in the confusing world of point-of-origin trade fights, the plane is coming home.

Whirlpool may complain with delayed effect to the Commerce Department about Samsung moving its production of washing machines around the Far East, in a clear effort to dodge point-of-origin problems, but Boeing may be out of options here. It’s fair to wonder why Boeing thought that Bombardier’s C-Series so threatened sales of 737s in the United States. Without the deep discounts on those 125 or so CS100s, would Delta have traded up to 737s, tolerating lower load factors over time on the same routes? Perhaps, but that sounds like strategizing from a fairly complicated economic model, and perhaps one rife with assumptions.

To the folks in Toulouse, that Canadian-now-Alabamian plane seems small enough that it doesn’t take too many sales from the A320 line. The C may not have sold well so far, but the Journal's Scott McCartney wrote last month of how much Swiss Air loves its lower-than-expected fuel consumption and its passenger comfort. If Airbus can translate this deal for an already-developed plane into real sales, the profits will reinforce its product development efforts, and the workload will reinforce its presence in Alabama.

To bring this question back to defense, consider what happens the next time the US Air Force needs another militarized airliner. Whether the flying service wants a tanker, transport, or surveillance plane, those guys in Alabama may have a more substantive industrial presence, and possibly better absorption of overhead across more units of production. That could translate into a sharper pencil, and at worst, another round of Boeing buying the business, just to keep the franchise. If nothing else, that’s a distraction and a financial risk to foist on a competitor.

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What I Do

James Hasik is a senior fellow at the Brent Scowcroft Center on International Security at the Atlantic Council. Since September 2001, he has been studying global security challenges and the economic enterprises that provide the tools to address them.

In the Press

On Section 232 silliness

And as Trudeau repeats whenever interviewed on American television, Canadian aluminum still ends up in U.S. fighter aircraft and its steel is used in American tanks. James Hasik, senior fellow at the Brent Scowcroft Center on International Security at the Atlantic Council, said that nobody he knows in the national security community believes that invocation of the Section 232 national security clause has any substance. “I can’t imagine the circumstances in which a Canadian federal government would try to choke off aluminum supplies to the U.S.,” Hasik said. Trump to See National Security Threat in Canada Firsthand, in the Washington Post, 7 June 2018.

On what to watch

James Hasik, a professor at the National Defense University, said he would be keeping a close eye on how the autonomous Sea Hunter vehicle does during ongoing testing. DARPA recently transferred the Sea Hunter, designed to travel thousands of miles over open seas, for months at a time, without a crew member on board, over to the Navy for continued testing. “The economics of that concept are so compelling,” Hasik said. If the concept proves out, it could have “some profound applications for fleet structure, some profound applications for warfighting.” What to expect from AI, space and other tech over the next 18 months, in Defense News, 10 May 2018.

On market entry, in the long run

Oshkosh “might wind up with a run of many decades as having been the favorite for military trucks in North America. But it doesn’t mean that they are guaranteed to keep it, because it’s an industry in which entry into the military market segment is not as challenging as it is in other segments”.
Army Moves Forward with New Medium Truck Acquisition in National Defense, April 2018

More on the brilliance of the feasible

“The Army’s failure to effect greater progress [in armored vehicle programs] may have seemed tragic, but retrospectively, it was almost fated: programs like FCS and GCV were doomed before they were begun. For had the future been more readily foreseen from within the department, technological trajectories like those would have called long ago for more modest investments. The Army’s leadership is just recognizing the art of the possible, and investing accordingly.”
Army Accelerates Armor: Stryker, Trophy, MPF Race To Field in Breaking Defense, 16 October 2017

On the brilliance of the feasible

“There’s actually no reason to dislike the program today. I haven’t noticed yet any meaningful cost overruns on JLTV. I think with fixed-price contracts — as they have — you’re not going to get them. From what I can tell it is a great deal. It does basically exactly what it’s supposed to do, and at a pretty reasonable price.”
JLTV Program Could Serve as Acquisition Model, in National Defense magazine, 9 October 2017

On staying out of the way

“In 2014, Russian signals intelligence drones and Russian artillery worked quickly and efficiently to target Ukrainian troops by triangulating their radio emissions. And as the Ukrainians learned, emitting in any pattern that says headquarters will attract lots of cannon and rocket fire.”
Army seeks fixes to vulnerable satellite communications,
in Space News, 28 September 2017